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Solid growth in mainland GDP in 2018

Published:

8 February 2019

The growth in gross domestic product (GDP) in the mainland economy (i.e. excluding the shipping and petroleum sectors) was
0.9 per cent in the 4th quarter of 2018, marking an increase from the previous quarter. This increase is partly attributed
to low growth in the 3rd quarter due to the unusually dry summer weather. Mainland GDP increased by 2.2 per cent in 2018 compared
to 2.0 per cent in 2017.

Agriculture contributed to mainland GDP growth in the 4th quarter with 0.2 percentage points following a corresponding negative
contribution in the 3rd quarter as a result of production loss following an unusually dry summer. Other goods-producing industries
saw growth, including the fishing industry, where a strong October contributed to quarterly growth. The construction industry
has enjoyed a long spell of high activity, and seasonally adjusted figures show that its gross product increased by 0.4 per
cent in the 4th quarter and 3.9 per cent in 2018.

The gross product of non-governmental services increased markedly throughout 2018. Seasonally adjusted growth was 0.6 per
cent in the 4th quarter, with wholesale and retail particularly strong in a grouping where most industries saw growth. Non-governmental
services increased by 2.6 per cent from 2017 to 2018. The gross product of public services increased by 0.4 per cent in the
4th quarter and by 2.2 per cent from 2017 to 2018.

Following stagnation in 2017 and a decrease at the start of 2018, manufacturing and mining has grown steadily for the last
three quarters. Seasonally adjusted figures show a 1.6 per cent growth in the 4th quarter, making annual growth 0.9 per cent.
Most industries grew, with the machinery and shipbuilding industry - an important supplier to the petroleum industry - the
most important contributor. Activity in the petroleum sector and international shipping mostly decreased throughout 2018 with
gross product down 2.7 per cent in the 4th quarter. This contributed to a total GDP (i.e. including shipping and the petroleum
sector) growth of only 0.5 per cent, and 1.4 per cent for the whole year.

Moderate growth in household consumption

Household consumption increased by 0.3 per cent in the 4th quarter, following a minor decrease in the previous quarter. The
moderate growth is mostly attributed to a decrease in the consumption of goods, a trend seen in the last six months. There
have been minor revisions to the numbers related to the publication of the index of household consumption of goods, where
direct imports from abroad are now incorporated.

Consumption of services has grown steadily throughout the year and was 0.6 per cent higher in the 4th quarter than in the
previous quarter. Good growth in the consumption of hotel and restaurant services as well as transportation services contributed
to this. Increased consumption on travel abroad also contributed to the increased total household consumption. Household consumption
increased by 1.9 per cent in 2018, compared to 2.2 per cent in 2017.

Public consumption increased by 0.1 per cent in the 4th quarter. From 2017 to 2018 consumption increased by 1.5 per cent.

Growth in investments in the petroleum sector

Following a downturn that started in 2014, investments in the petroleum sector increased by 3.3 per cent in 2018 and 4.3 per
cent in the 4th quarter, according to preliminary national account data. The investments are expected to increase in the following
years. Larger projects include Johan Sverdrup phase I and II, Johan Castberg, and the completion of Martin Linge.

Gross investment in mainland Norway decreased by 2.4 per cent in the 4th quarter, while the annual average was 0.7 per cent
higher than in the previous year. Investment in manufacturing and mining decreased somewhat in the 4th quarter; however, the
annual average for the year overall increased by 10.4 per cent in 2018 following a decrease of 2.5 per cent in 2017. In addition,
investment in power generation increased throughout 2018.

Investments in public services increased as well in 2018, by 6.6 per cent. They were however 5.6 per cent lower in the 4th
quarter than in the 3rd quarter, but this is largely attributed to the delivery of three fighter jets to the Norwegian Air
Force in the 3rd quarter and none in the 4th.

Household investment in real estate decreased by 6.0 per cent in 2018. The figures for the second half of 2018 show a weak
increase as both the 3rd and 4th quarters saw a 0.12 per cent increase.

Increased export of traditional goods

The export of traditional goods (i.e. excluding petroleum, ships, oil platforms, and aircraft) increased by 4.9 per cent in
the 4th quarter, with exports of machinery and pharmaceutical products making a notable contribution. The exports of traditional
goods increased by 2.5 per cent in 2018.

Preliminary estimates show that exports of services fell by 6.8 per cent in the 4th quarter. Combined with a fall in exports
of oil and natural gas, this gave a total fall in the volume of exports of 1.9 per cent in the 4th quarter. For 2018, growth
was 0.8 per cent.

Imports of traditional goods continued to increase in the 4th quarter, but a decrease in the importation of aircraft and services
contributed to a decrease of 1.0 per cent for imports overall. Imports of goods and services increased however by 0.9 per
cent from 2017 to 2018.

2.8 per cent growth in annual income

Average annual income is estimated to have increased by 2.8 per cent in 2018, compared to 2.3 per cent in 2017.

Preliminary estimates show that seasonally adjusted employment increased by 0.5 per cent, or the equivalent of 13 500 persons
in the 4th quarter. There were on average about 42 600 more employees in 2018 than in 2017. The number of hours worked increased
throughout the year and by 0.6 per cent in the 4th quarter. The increase in productivity for mainland Norway per hour worked
is preliminarily estimated to be 0.7 per cent.

Revisions

New monthly figures will lead to revisions for previous months. Note that the non-seasonally-adjusted statistic will normally
not change for previous months but the seasonally adjusted figures derived from them may. This is because seasonal adjustments
may change as new periods are added to a time series. Consequently, there may be changes in certain time series until these
have become longer as this is a recently developed statistic. As more observations are added this effect will decrease.

Since the last publication in January, GDP for mainland Norway has not changed much. The 2nd quarter GDP growth is revised
from 0.6 to 0.7 per cent. The 3rd quarter is revised from 0.3 to 0.4 per cent. A list of revisions of macroeconomic key figures
since the November publication of the 3rd quarter is found in table 10.

To see the development in GDP for some of our main trade partners, see statistics from the OECD.